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Study: Fear of Failure and Time Commitment Are Key Reasons Potential Entrepreneurs Abandon Their Aspirations

  • Kauffman Foundation study on pre-entrepreneurship “leavers” looks at steps potential business owners take to start a venture and why they decided to give up or wait
  • Pre-entrepreneurs often discussed their idea with a friend or colleague, but rarely brought it to the attention of professionals
  • Concerns about the sustainability of the business or its time commitment were key reasons pre-entrepreneurs opted not to pursue their idea

Fear of failure and concerns about time commitment are the main reasons potential entrepreneurs opt not to pursue a business idea, according to a recent report from the Ewing Marion Kauffman Foundation. People were also more likely to discuss a business idea with a friend or colleague than they were to pursue it with a professional.

The report on pre-entrepreneurship “leavers” was based on a national survey of 22,000 adults conducted between June and August. The foundation estimates that almost 6 percent of the U.S. population have seriously mulled whether to launch their own business before deciding against it.

A pre-entrepreneurship leaver is defined as someone who hasn’t previously owned a business, is “deeply interested” in starting one, has a specific business idea in mind, but decided either to not pursue the idea or wait to do so. Leavers fall short of being considered active entrepreneurs, who seek the support of small business programs or otherwise take steps toward launching a company.

Forty-six percent of those who contemplated starting a business said they wanted to be their own boss, while 41 percent hoped to increase their personal wealth and 41 percent were interested in pursuing a passion. Women were more likely to be motivated by the desire for flexibility and personal freedom, with white women being the most likely group to want to pursue a passion. Men were most likely to want to increase their wealth.

Half of the respondents said they had discussed their idea with a friend or colleague, but only 15 percent took it to an expert specific to that field or market. Just 10 percent sought advice from other business professionals.

Twenty-seven percent researched the market, but only 10 percent conducted a financial analysis of their idea. While one in five pre-entrepreneur leavers talked to personal sources about funding and learned about other sources of financing, just 5 percent applied for funding.

Forty-seven percent said they decided not to start their own business because they were worried it would not survive. Other common reasons for abandoning the pursuit of a business idea were concern that it would take too much time (36 percent), potential burnout (34 percent), or fear that it could strain relations with their family (22 percent).

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